Enter Dena Bank, says SP Tulsian

SP Tulsian of sptulsian.com told CNBC-TV18, "Dena Bank is a mid-sized PSU bank. They have about 1,400 branches and about 550 ATMs. When you compare the mid-sized PSU banks, this bank is quite cheap amongst many comparable ones for the simple reason that it is ruling at a PE multiple of 3.6x, price-to-book of 0.6. Apart from that, the dividend declared by the bank of 47 percent is Rs 4.70 and yields about 5.56 percent."

He further added, "The share is going ex-dividend on June 20. All those who will be buying the stock will be able to get the dividend, because they still have about 8 days to pocket the dividend of Rs 4.70. So straightway, your cost comes down to a level of about Rs 78 which is quite low. Also, if you see their gross non-performing asset (NPA) at 2.2, net NPA at 1.4 percent is also quite low when you compare it with many other mid-sized PSU banks."
"I am not comparing it with bigger ones like Punjab National Bank (PNB), State Bank of India (SBI). In the similar space the net and gross NPA is also quite low with the net interest margin (NIM) placed at over 3.15 percent for the year. Taking the overall call and the kind of weakness in these mid-sized PSU banking stocks, it makes for an ideal entry point ahead of the dividend, because now the next dividend chance will come only after one year."
"So taking all this into account, price-to-book of 0.6, PE multiple of 3.6x with earnings per share (EPS) of close to Rs 23 having declared by the bank for FY13, makes a good entry point into the stock with price target of Rs 100 in next six months or so." Disclosure: No holding or interest in the stock.